Robotics in Retail

Robotics and artificial intelligence (AI) are revolutionizing retailing. From manufacturing to ordering to fulfillment to delivery, robots are changing the way retailers do business. Take ecommerce behemoth Amazon, for example. The company acquired robotics maker Kiva Systems in order to enter robotics in a big way (in 2012), and the resulting subsidiary, Amazon Robotics, designs and builds robots that handle most of the firm’s warehouse and fulfillment operations. At any of its million-square-foot distribution centers, you will find Kiva robots that can carry hundreds of pounds at once. These units are “automated guided vehicles” or AGVs, that can find their way quickly around a warehouse by following barcodes on the floor.

When a customer places an order, the robot finds the item in the warehouse and takes it to a human worker who takes the item, scans a barcode and sends it by conveyor belt to a packing station. AI determines the proper box size and another human worker places the item in the box. A robot handles the package sealing and shipment label and off it goes. In the current system, Amazon uses about one minute of human labor to fulfill each order, but that will lessen as robots become better and more capable of human skills such as grasping and placing. According to Deutsche Bank, the Kiva Systems acquisition cut Amazon’s fulfillment costs by 20%.

In 2022, Amazon Robotics introduced the Proteus, which is an autonomous mobile robot (AMR). This is a major addition to the Kiva/Amazon system. The Proteus can work alongside warehouse employees, sliding under carts (“GoKarts”) laden with merchandise, picking the carts up and speeding them along to workers or to designated packing areas. Another recent Amazon innovation called Cardinal can pick up a package, read its label and then place it into a GoKart for quick movement through the warehouse system.

Groceries warehouses are becoming highly automated as well. In May 2018, Kroger Co. acquired a minority stake in Ocado, a U.K.-based grocer which is developing fully automated warehouses.

Robot manufacturer Berkshire Grey is working to take humans out of retail fulfillment tasks. It developed a small robot known as a FlexBot, which operates like a driverless car to roll under storage shelves and pull bins containing the desired item(s) onto its platform. The FlexBot then transports the bins to robotic arms that grasp items and place them into shipping boxes. Yet another set of robotic arms sorts the boxes for shipment on conveyor belts. The system uses air compression and suction cups to grasp items and boxes, and cameras and artificial intelligence (AI) to verify each item and shipment information.

In addition, many large chains are utilizing robots to collect and organize items for customer pickup and/or delivery, a shopping trend that has soared with the onset of the Coronavirus pandemic. Grocers, such as Albertsons and Kroger, are also utilizing this technology. According to Alert Innovation, a human store worker can collect about 80 products from store shelves per hour, while the Alphabot system is designed to collect 800 products per hour per workstation.

Retailers, including Gap and Target are using dedicated space within stores as fulfillment centers. Gap reported that it used its stores to fulfill more than 90% of its ecommerce sales during a recent quarter. In 2022, Walmart announced plans to build small, automated fulfillment centers attached to about 100 existing stores over the midterm. The intent is to fill online orders more quickly without blocking store aisles with employees filling online orders. This concept is referred to as “micro fulfillment” by logistics experts. Walmart acquired Alert Innovation in 2022, a robotics company that specializes in merchandise handling automation for such centers.

Fast fashion retailer Zara is installing automated pickup stations in its stores, where customers collect items purchased online. Behind the scenes, robots search for the purchased item(s) in a nearby storage area and quickly transfer the order to a drop box.

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